Tax rates in the United States are relatively higher. Higher
taxes lead to reduce the consumption of goods and services.
Consumption is a component of aggregate demand.

Aggregate demand falls due to decline in the consumption
expenditure. Thus, federal government should continue cutting
taxes.

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Step 2 of 2

Higher payroll taxes affect the willingness to work in the
United States. People have to sacrifice larger portion of their
income due to higher taxes. Reduction in the taxes is beneficial to
stimulate the economic growth.

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